EASTERN SPINNING MILLS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The present Rule was obtained on 20-11-1980 by the petitioners Eastern Spinning Mills Ltd. and Another praying, inter alia, for a Writ of Mandamus for commanding the respondents to forbear from giving any effect or further effect or taking any step whatsoever pursuant to and/or furtherance of the purported Notification Nos. 214-Customs/80 and 215-Customs/80 both dated November 1, 1980 and the other purported Notification dated June 19,1980 and all proceedings relating thereto and/or from demanding any basic duty of customs or any countervailing duty in excess of Rs. 2.37 P. per kg. on the viscose staple fibre imported by the petitioner Company as mentioned in and pursuant to the contracts in Annexure "D" prior to December 31,1980.

(2.) It is stated that the Notifications dated 5th January, 1979 as amended by Notification dated October 30, 1979 clearly stated that the exemption granted thereunder would remain in force upto and inclusive of December 31, 1980. Representations were made by the Government of India fully knowing that the importers of viscose staple fibre including the petitioner No. 1 would be acting thereupon and it is alleged that in fact, the petitioner No. 1 on the basis of representations made by the respondent No. 1 herein, in the said Notifications entered into contracts for import of viscose staple fibre and thus acting on such basis, there was promise by the respondents and the respondents cannot take steps to circumvent the situation or stand by issuing the impugned notice to the prejudice of interests of the petitioners. It is further alleged that the respondents having made the promises aforesaid which were fully within their powers, competence and authority and the petitioners having acted thereby and on the basis thereof and also having altered their position, respondents cannot do anything to the prejudice of the petitioner Company and the principle of promissory estoppel is aptly applicable in the facts and circumstances of the present case and the petitioners are entitled to reliefs indicated above and prayed for in this writ petition. The facts in detail have been elaborated in the writ petition.

(3.) Mr. Bagaria, learned Counsel appearing for the petitioners argued with much emphasis that by applying the principle of promissory estoppel the reliefs cannot be denied to the petitioners in the manner sought for. He has drawn the attention of the Court to various decisions. First of them is "Pournami Oil Mills v. State of Kerala and Anr.". It was found therein that it is well settled principle of law that where the authority has power conferred on it by Statute, to make an order and once order is made without indicating the provisions under which it is made, the order would be deemed to have been made under that provision of the Statute. In that case, the question of exemption to new industries from sales tax and other tax for five years were considered. The attention of the Court has been drawn to another case reported in 65 S.T.C. 430 (State of Bihar and Anr. v. Usha Martin Industries Ltd.). Following the decision of Pournami Oil Mills (Supra) and (Motilal Padampat Sugar Mills v. State of U.P.) reported in 44 STC 42, it was found in that case that the Sales Tax Authorities were bound to give exemption on the basis of the resolutions and the respondents were entitled to incentives in terms of the resolutions.